The United Kingdom and the United States have hammered out a major bilateral deal that will keep zero levies on British medicine products being sold in the American market.
Agreement Details of the Pact
Under the terms of the agreement, the UK has pledged to raise funding on drugs through the NHS. This move secures that import taxes on these key exports will stay at zero for a period of 36 months.
This deal follows earlier threats to hike tariffs on branded pharmaceutical imports, with figures floated as high as double the cost.
"This arrangement between the United Kingdom reinforces the international landscape for new treatments and establishes long-overdue equity to American-British drug exports," a release said.
Commercial Importance
Medicines represent one of the Britain's largest goods shipped to the US, which is clearly the primary buyer for major British pharmaceutical firms.
Statistics indicate that in the one-year period prior to September, the UK sold drugs totaling over eleven billion pounds to the US. This amount accounted for 17.4% of all goods exports in that timeframe.
"This guarantee safeguards jobs, stimulates capital expenditure and facilitates the UK to emerge as a worldwide center for medical research," the Business and Trade Secretary stated.
Detailed NHS Changes
The pact includes several notable changes from the United Kingdom:
- Revised Affordability Limit: The UK will increase the affordability limit at which it deems new medicines to be too expensive by a quarter.
- Boosted Medicine Funding: There is a goal to raise total health service expenditure on treatments from 0.3% of Gross Domestic Product to 0.6% over the coming ten years.
- Refund Ceiling: The percentage drug companies must pay back to the NHS to prevent overspending will be capped at fifteen percent. Last year, repayments were more than 20%.
Recent Tensions
This agreement comes amid a protracted row between the pharmaceutical industry and the ministers over medicine costs and approval rates.
These tensions were exacerbated by assertions that American consumers were paying several times more for the equivalent treatments than patients in the other developed nations.
Over the last 18 months, several significant pharmaceutical investments in the UK have been delayed or cancelled, while multi-billion-dollar funding commitments have been directed toward projects in the United States.
The Science Minister publicly accepted that the NHS must invest a greater share on medicines, noting that its spending on drugs had declined as a share of its overall budget over the past decade.